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Gas compressor fraud allegation against Deep

Vol 13, PW 25 (03 Jun 10) People & Policy

Deep Industries looks destined to attract controversy - no matter what it does! India’s government has already denied the Ahmedabad-based company seven CBM blocks won in the last licensing round, amid allegations that its US-based parent company Coal Gas Mart doesn’t exist.

Now Deep is accused of fraud, this time in its gas compressor business. PETROWATCH learns ONGC’s chief vigilance officer Swadeep Singh received a letter on May 16 from Sadhuram Chaudhury, owner of the relatively unknown Assam-based firm Shiv Shakti Oilfield Services, accusing Deep of fraudulently winning contracts to supply gas compressors to ONGC.

Copies of the letter are also marked to ONGC director onshore AK Hazarika and executive directors and heads of the material management departments at ONGC assets at Rajahmundry, Ahmedabad, Ankleshwar, Assam and Mehsana. When contacted, Chaudhury explains his company hires portable power generators to ONGC, GeoEnpro and Oil India.

“I wanted to enter the gas compression business,” he says, “and noticed Deep had named ‘Gulf Petroleum Machinery’ as its technical partner for the compressors it supplies.” Chaudhury claims he then tried to contact Gulf Petroleum Machinery in the hope of forming a partnership but discovered the company doesn’t exist.

“Deep quotes Gulf Petroleum Machinery in all past and ongoing tenders with ONGC,” says Chaudhury, who wants ONGC to reject all the company’s bids. To support his allegation, Chaudhury says the Gulf Petroleum Machinery website mentions only a PO Box number with no other address.

Chaudhury believes this PO Box belongs “to some other company,” and further alleges the Gulf Petroleum Machinery website was set up this April by “someone based in Ahmedabad” - but crucially, offers no evidence to back his claim. Chaudhury further alleges the Gulf Petroleum site is managed by Deep itself.

Worse, he attacks Deep for supplying old and second-hand compressors. “ONGC is being cheated,” he writes in his letter to Swadeep Singh.

Deep Industries rejects Chaudhury’s allegations out of hand. “These people should just come forward and compete with us in business,” says Deep chairman Paras Savla, when contacted. “They should not indulge in mudslinging.” Savla hits back at Chaudhury, claiming Shiv Shakti Oilfield Services is a fictitious company. In a twist to the story, Savla believes the defamatory letter was written or motivated by Sibsagar-based Kakoti Engineering Works, one of Deep’s rivals. Savla confirms Deep signed an agreement with Gulf Petroleum in March to represent its business interests in India but adds the two companies haven’t “done a single deal” till date. Savla stresses that Houston-based Valerus Compression Services has been Deep’s technical partner for over eight years - a fact confirmed by the Valerus website, which lists Deep as its Indian agent. Savla is also angry that the defamatory letter has been forwarded to Valerus in Houston. ONGC vigilance department sources downplay the letter, saying it should not be taken seriously. “The complainant (Sadhuram Chaudhury) has not even signed it,” says ONGC. “Only a cell-phone number is provided under his name.” ONGC director AK Hazarika’s office likewise declined to comment.

Deep Industries rejects Chaudhury’s allegations out of hand. “These people should just come forward and compete with us in business,” says Deep chairman Paras Savla, when contacted. “They should not indulge in mudslinging.” Savla hits back at Chaudhury, claiming Shiv Shakti Oilfield Services is a fictitious company. In a twist to the story, Savla believes the defamatory letter was written or motivated by Sibsagar-based Kakoti Engineering Works, one of Deep’s rivals. Savla confirms Deep signed an agreement with Gulf Petroleum in March to represent its business interests in India but adds the two companies haven’t “done a single deal” till date. Savla stresses that Houston-based Valerus Compression Services has been Deep’s technical partner for over eight years - a fact confirmed by the Valerus website, which lists Deep as its Indian agent. Savla is also angry that the defamatory letter has been forwarded to Valerus in Houston. ONGC vigilance department sources downplay the letter, saying it should not be taken seriously. “The complainant (Sadhuram Chaudhury) has not even signed it,” says ONGC. “Only a cell-phone number is provided under his name.” ONGC director AK Hazarika’s office likewise declined to comment.